ReportWire

Tag: Sporting Goods Stores

  • Nike stock rallies after another earnings beat

    Nike stock rallies after another earnings beat

    Shares of Nike Inc. rallied after hours on Tuesday after the athletic-gear giant reported third-quarter results that topped expectations.

    The maker of sneakers and sports apparel reported third-quarter net income of $1.24 billion, or 79 cents a share, compared with $1.4 billion, or 87 cents a share, in the same quarter a year ago. Revenue increased 14% to $12.39 billion, compared with $10.87 billion in the prior-year quarter.

    Analysts polled by FactSet expected earnings per share of 56 cents, on sales of $11.48 billion.

    Nike’s
    NKE,
    +3.64%
    gross margin fell 330 basis points to 43.4%. Inventories stood at $8.9 billion, up 16%, amid “higher product input costs and elevated freight costs.”

    For Nike’s fourth quarter, FactSet estimates called for earnings per share of 81 cents, on revenue of $12.55 billion. For the full year, those analysts expected earnings of $3.15 a share, on sales of $50.11 billion.

    Shares rose 3.5% after hours. The stock also jumped after Nike’s last earnings report, in December, which also topped estimates.

    Nike reported earnings after it cut prices in an effort to clear clothing and other items from its warehouses, following supply-chain hiccups that led to an excess of off-season goods and rising prices for basics. Those higher prices made customers less interested in dropping money on a new pair of sneakers.

    However, Jefferies analyst Randal Konik, in a research note last week, suggested that rival Adidas AG’s struggles could become Nike’s gains, as Adidas
    ADDYY,
    +0.41%
    finds itself stuck with a bunch of Kanye West-branded shoes. West’s antisemitic remarks last year led to the termination of a collaboration between the two.

    “The athletic footwear space is highly fragmented, and we believe that NKE will likely continue to benefit as Adidas regroups,” he said in a note.

    Konik said that Jefferies’ own data suggested that holiday-season interest in sneakers was still strong, despite inflation. And he said trends in China were getting better, as that nation’s economy reopens.

    Foot Locker Inc.
    FL,
    +7.07%
    on Monday said that it had “revitalized” its relationship with Nike — to focus on data-sharing and sneaker culture — after Nike began focusing on selling products online and through its own retail stores. And after weaker sales of Nike products in the past, Foot Locker Chief Executive Mary Dillon said the new arrangement with Nike would return both to growth in 2024.

    Shares of Nike are down 4.4% over the past 12 months. By comparison, the S&P 500 Index
    SPX,
    +1.30%
    is down 10.4% over that period.

    Source link

  • Nike stock jumps more than 10% as earnings, sales destroy expectations

    Nike stock jumps more than 10% as earnings, sales destroy expectations

    Nike Inc.’s stock spiked more than 13% in extended trading Tuesday after the sporting-goods retailer reported early holiday earnings and sales are tracking solidly higher than Wall Street expected, though inventories remain high and a forecast could still loom.

    Nike
    NKE,
    +0.16%
    reported fiscal second-quarter net earnings of $1.33 billion, or 85 cents a share, compared with net earnings of 83 cents a share in the year-ago quarter. Revenue was $13.32 billion, up 17% from $11.36 billion a year ago for the sneaker maker in the quarter, which ended Nov. 30.

    Analysts surveyed by FactSet had expected on average net earnings of 64 cents a share on revenue of $12.58 billion.

    Nike executives did not provide a third-quarter forecast in their announcement, though Chief Financial Officer Matthew Friend said in a conference call he expects annual revenue grow in the the “low teens.” In an earlier statement, Chief Executive John Donahoe said the results “give us confidence in delivering the year as our competitive advantages continue to fuel our momentum,” while Friend added, “We are on track to deliver on our operational and financial goals.”

    In a conference call late Tuesday, Donahoe noted a rebound of business in China and improving inventory levels because of strong consumer demand.

    Nike announced the results amid a daunting confluence of slackening consumer spending, foreign-exchange headwinds and an elevated promotional environment, Jefferies says in a research note. In September, Nike shares tumbled after executives said markdowns on the retailer’s products would squeeze margins, and they expected clothing competitors to keep slicing prices through at least the end of the year.

    Read more: Inventory concerns are pounding Nike’s stock

    With consumers buying fewer clothes, Nike and other retailers have shouldered swelling inventories, though executives at Nike insist the level of excess goods likely peaked in North America this summer. In Tuesday’s report, Nike reported inventories of $9.3 billion, up 43% from the same quarter a year ago. Analysts on average were projecting inventories of $8.83 billion, according to FactSet.

    “The market is focused on progress to resolution of FY23 inventory issues as a set up to a strong margin recovery” in fiscal 2024, Stifel analysts said in a note last week.

    Shares of Nike have declined 38% this year, while the broader S&P 500 index
    SPX,
    +0.10%
    is down 20%.

    Source link